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Populism’s Great Replacement of Economics

Dozens of countries will hold national elections in 2024, in what many view as a kind of plebiscite on the postwar global order. The likely rejection of that order in favor of populist leaders should serve as a wake-up call for policymakers to heed the message that no economy exists outside the society that created and sustains it.

CAMBRIDGE – In 1944, as World War II neared its end, the exiled Hungarian economic sociologist Karl Polanyi published The Great Transformation, a treatise that focused on the dangers of trying to separate economic systems from the societies they inhabit. Eighty years on, Polanyi’s warnings about a market economy unleashed from human needs and relations may prove prescient. In fact, the future that he foretells bears a strong resemblance to Mary Shelley’s Frankenstein, in which the doctor’s creature runs amok and eventually turns on its creator.

That future may be upon us. In 2024, the biggest election year in history, people in dozens of countries, representing half of the world’s population, will go to the polls. The list includes the world’s two largest democracies (India and the United States) and three of its most populous countries (Indonesia, Pakistan, and Bangladesh). And the European Union, comprising nearly half a billion people from 27 countries, will hold parliamentary elections.

Many commentators and experts view this global synchronicity as a kind of plebiscite on the postwar global order. So far, the popular reviews do not look favorable. Some argue that the world is experiencing a “democratic recession,” citing evidence of declining levels of global freedom, authoritarian backsliding, and attacks on free and fair elections. Naturally, all of this raises the question of how we got from the blinding hope that accompanied the end of the Cold War – what Francis Fukuyama famously called the “end of history” – to today’s profound disillusionment.